Is self-storage damage cap enforceable?

There’s this new reality show “Auction Hunters” about these two guys who bid on the contents of abandoned self-storage units.

While the stars of the show, Clinton “Ton” Jones and Allen Haff, hope to snap up forgotten treasure for a song, I’m left wondering about what became of the renters whose personal property is being auctioned off for pennies on the dollar.

Lo and behold a case surfaced last month in which a jury awarded a woman $22,000 after the contents of her storage locker were sold for the paltry sum of $20.

The case involved Jane Frances Low of Wisconsin. In May 2005, Low leased a ten-by-ten-foot storage space from Penn Self Storage at the rate of $65 per month.

Low fell behind on her rent and Penn sold the contents of her storage space at an auction for $20. Penn took the further step of filing a small claims action to recover the balance of what Low owed under the rental agreement.

Low was understandably miffed at the loss of her personal belongings and counterclaimed for violations of the Wisconsin law governing self-service storage facilities.

Specifically, Low alleged that Penn’s rental agreement was deficient in notifying her of the company’s rights in case of her default. In addition, Low claimed that Penn violated state law in the manner in which it advertised the sale of her personal property.

A Dane County jury agreed that Penn had violated state law and awarded Low $22,000 in compensatory damages.

Penn succeeded in having the verdict reduced to $15,000 under a provision in the rental agreement whereby Low agreed not to store property in the leased space that had a total value in excess of $15,000 without prior written permission. The clause further limited Penn’s liability to this amount.

Low appealed, arguing that the limitation-of-liability clause was unenforceable under state law.

Low lost that argument just before Christmas when the Wisconsin Court of Appeals ruled that the self-storage company was within its rights to limit its liability.

The court concluded the state law governing self-service storage facilities was a comprehensive legislative scheme and that nothing in the statute prohibited Penn from restricting use of the leased space to personal property below a specified value.

The court explained that Penn violated the statute by failing to observe procedural protections before selling Low’s property, not by limiting the value of the property Low could store in the leased space without Penn’s permission to $15,000.

“An award of $15,000 compensates Low for the property she lost that was stored in the leased space consistent with her agreement. It does not compensate her for the value of property she stored in excess of the agreed upon amount, but we see nothing in [the statute] that requires this result. ….

“Low chose not to seek permission from Penn to store property at a higher value and therefore took the risk that, if her property exceeded $15,000 in value, she would not be able to recover its full value,” the court said. (Low v. Penn Self-Storage)